Shanghai, Shenzhen Exchanges to Cut A-Share Trading Fees

The benchmark Shanghai Composite Index is up 9 percent in 2012, after slumping 33 percent in the previous two years. Photographer: Qilai Shen/Bloomberg

May 1 (Bloomberg) -- China’s two stock exchanges will lower
fees charged for trading yuan-denominated shares by 25 percent
with effect from June 1, the nation’s securities regulator said
in a statement on its website yesterday.

The Shanghai and Shenzhen bourses will charge both buyers
and sellers 0.087 percent of the transaction value, and the
Shanghai branch of the China Securities Depository & Clearing
Corp. will set transfer fees at 0.375 percent of transaction
value, according to the China Securities Regulatory Commission.

China’s capital market has expanded over the years as the
number of listed companies and stock trading volumes increase,
paving the way for lower fees, the CSRC said. The changes will
ease the burden on investors and spur the “healthy
development” of the market, it said.

“The regulators are trying to revive and excite the
trading in the A-share market, which has been a poor market over
the last few years,” Khiem Do, the Hong Kong-based head of
Asian multi-asset strategy at Baring Asset Management Asia Ltd.,
which overseas about $10 billion, said by telephone. “The
spirit of the change is obviously to get retail investors to go
back into the A-share market and increase trading activity.”

The benchmark Shanghai Composite Index is up 9 percent in
2012, after slumping 33 percent in the previous two years.

About 8.95 billion A shares changed hands each day this
year on the Shanghai stock exchange, and average daily trading
in Shenzhen was 3.5 billion shares. That’s a fraction of the 153
billion shares traded on the Hong Kong stock exchange each day,
according to data compiled by Bloomberg.

Research is also being conducted to lower the cost of
information disclosure and other operating fees, according to
the CSRC’s statement.